A2 Milk revenue rises 12% in FY2026, margins under pressure

A2 Milk reported a 12% rise in revenue for the fiscal year ending March 2026, though operating margins remained under pressure due to elevated costs and competitive pricing.

The specialty milk producer, known for its A2 beta-casein protein variant, posted revenue of NZ$1.85 billion for the year, up from NZ$1.65 billion in FY2025. The growth was driven by volume increases in key markets including Australia, China and the United States.

Despite the revenue gain, gross margins contracted to 32% from 38% in the prior year, reflecting higher raw material costs and intensified promotional activity. Operating expenses rose 15% year-over-year, primarily due to marketing spend and distribution expansion.

A2 Milk maintained its dividend at NZ$0.15 per share, unchanged from FY2025, as the company prioritized reinvestment in growth initiatives. Chief Executive David Bortolussi noted that while demand remained robust, margin recovery would depend on cost efficiencies and pricing power in competitive dairy markets.

Shares of A2 Milk fell 3.2% in early trading on the NZX, extending declines from the prior session as investors weighed the margin outlook against revenue growth.